NBA star LeBron James will step out of his current contract to sign a one-year deal which is said to be his best decision so far, according to Business Insider.
It was reported by Joe Vardon from the Northeast Ohio Media Group that James will use the "trade kicker" in his contract.
At present, James is signed up with the Cleveland Cavaliers for a two-year contract that offers an opt-out clause. His contract is worth $42.4 million. However, if James would be traded out, he could receive an extra compensation amounting to about "15 percent of the remaining value of the contract."
However, James' trade kicker could still be uncertain since he only have until summer this year to use the opt-out clause in his contract. Still, if he chooses to opt-out and sign another one-year contract with the team, he will earn an additional $1.7 million.
If he decides to cut his contract, he will be a free agent but it is suspected that he will come back to Cleveland again. Vardon added, LeBron would like to sign another year with the team immediately after he becomes a free agent.
James' stance makes perfect sense financially. In his current contract for 2015 to 2016, he is reported to receive $21.6 million, and this is the maximum number he can get.
According to Business Insider, his current contract is already "capped at 35 percent" for his 2014 to 2015 tenure. However, his annual salary cap rises by 4.5 percent annually.
If James opts out and renews his contract, he will receive an increase in the salary cap because the salary cap for 2015 to 2016 will definitely be higher than last season's.
All in all, James is bound to earn $23.3 million for renewing a 2015 to 2016 contract with an added $1.5 million extra from opting out of his current deal, according NBA Salary Cap expert Larry Coon.
Though it is not a significant increase, James' can get a guaranteed 5 percent increase from his 2014 to 2015 contract.
It is also reported that James will only sign a one-year deal with the Cavaliers because there is an expected spike in the salary cap in 2016, according to Tony Manfred of the Business Insider. Therefore, if he will stick to his current contract, he is bound to lose tens of millions of dollars.
This is said to be an unusual move for NBA players since a long-term contract is a guaranteed deal. But, for James, staying in the NBA is not going to be an issue considering his historical performances.
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